When a contingent consideration arising from a business combination is classified as equity, how is any change in its fair value accounted for if the difference arises due to a change in circumstances?

A) As an adjustment to the consideration paid for the subsidiary.
B) As an adjustment to an estimate included in the determination of net income.
C) As a memorandum entry indicating that additional shares had been issued.
D) As an adjustment to consolidated contributed surplus.

When a contingent consideration is classified as equity, any change in its fair value due to a change in circumstances is not recognized in profit or loss or other comprehensive income. Instead, it is treated as if additional shares were issued or equity instruments granted, hence the correct treatment is akin to a memorandum entry indicating that additional shares had been issued. This approach reflects the equity nature of the consideration, where fluctuations in value do not impact the financial statements in the same way as asset or liability adjustments would.